Viking shares surge on expedited late-stage obesity drug trial plans

Shares of Viking Therapeutics surged by over 30% early Thursday as the company announced it would advance an experimental obesity drug, VK2735, to Phase 3 trials sooner than anticipated. The decision came after a meeting with the Food and Drug Administration (FDA). The company is also looking into more convenient dosing schedules for the drug. In a recent Phase 2 trial, VK2735 demonstrated promising results, with patients losing up to 15% of their body weight over a 13-week period. These findings could position Viking's drug as a strong competitor to existing blockbuster obesity medications from Novo Nordisk and Eli Lilly.

Analysts had initially predicted that the next step for VK2735 would be a Phase 2b trial. However, Viking Therapeutics disclosed on Wednesday that it would skip directly to Phase 3 based on the positive feedback from FDA officials. Additionally, the company is planning to explore monthly injection options for VK2735, which could be more convenient than the current once-weekly injections available on the market. Viking's President and CEO, Brian Lian, emphasized that offering both weekly and monthly dosing options could make the drug more appealing to patients by allowing them to better tailor their treatment to their lifestyle and preferences. An earlier study had also shown potential in a tablet form of the drug.

Based in San Diego, Viking Therapeutics is entering a burgeoning market that has seen significant growth with the introduction of Novo Nordisk's Wegovy and Eli Lilly's Zepbound. Other companies, including Amgen, Roche, Boehringer Ingelheim, Zealand Pharma, Pfizer, and Structure Therapeutics, are also racing to introduce their own obesity treatments. Given the intense competition, Viking's rapid development of VK2735 is commendable, noted William Blair analyst Andy Hsieh in a Thursday report to clients. Hsieh suggested that the Phase 3 trial could commence in early 2025, just three years after the start of Phase 1 trials.

Viking Therapeutics plans to provide more details about the Phase 3 trial following another meeting with the FDA later this year. Additionally, the company intends to begin a 13-week Phase 2 trial of the tablet form of VK2735 in the fourth quarter. With promising results in obesity treatment and a robust pipeline of other products, analysts consider Viking an attractive partner for larger pharmaceutical companies or even a potential acquisition target. During a conference call, Lian mentioned that there were no new updates regarding potential collaborations but reiterated that the company remains open to opportunities. In the meantime, he stated that Viking is well-funded and focused on advancing its development programs.